The Effects of Technology on Commercial Real Estate
While office, retail, and industrial space used to be essential, 2020 taught us that the digital space makes it possible to do business without physical locations. More people work from home, shop online, and import their goods from overseas. That, combined with the economic toll of the past year, has led to empty buildings and abandoned storefronts. While some businesses will need these spaces again, others closed or deliberately downsized. All of this means an investment in office, retail, or industrial spaces can be risky.
A Tool for Wealth Building
Commercial real estate has built wealth for people for years, with 80% of millionaires attributing their wealth to this type of investing. What do investors do now?
The answer is multi-family housing. People will always need a place to live. In many cities, multi-family dwellings are attractive for downtown living, which is thriving as big businesses set up shop in many regions. Living and working near the office is also attractive for environmentally-friendly lifestyles.
Travel Implications
As the travel industry took a significant hit in 2020, many hotels went out of business. Investors are seeing a prime opportunity to convert hotels into multi-family housing, an inexpensive process relative to the eventual profit.
Technology has changed the way business is done and will continue to do so. But housing will always be necessary, making it a good investment as the world continues to change.